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ISBN 978-1-78467-056-6
i
October 2016: Floating Liquefaction (FLNG): Potential for Wider Deployment
Acknowledgements
My thanks to colleagues in the LNG industry for their input and final review.
ii
October 2016: Floating Liquefaction (FLNG): Potential for Wider Deployment
Preface
The softening of European hub prices and Asian LNG spot prices in early 2014, followed by the
plunge in oil prices later that year has created an extremely challenging business environment for the
LNG industry. Current prices whether spot or oil-indexed LNG contract prices - are well below
levels recently regarded as necessary for projects to achieve FID. To make matters worse, new
capacity from projects under construction will continue to add supply to a market in which demand
growth is slower than had been anticipated. The market will clear as Asian demand absorbs new
volumes and as Europe continues to require new import volumes to offset domestic gas production
decline with perhaps some demand growth in the power sector. It may be however that the current
glut persists until the early 2020s.
Against this background, it is a testament to the resilience and adaptability of the LNG industry that it
is embarking on an experiment to test the hypothesis that FLNG provides a means by which
stranded gas discoveries can be monetised and, perhaps more fundamentally, that with its shorter
lead times, lower fabrication execution risk and the entrepreneurial vibrancy which comes from
competing providers and approaches, FLNG could prove more generally to be more viable than
conventional onshore liquefaction plant.
Following from his 2014 paper on LNG plant cost escalation, Brian Songhurst provides a
comprehensive review of the state of play of FLNG, the competing approaches and the advantages
and disadvantages compared with conventional onshore liquefaction. Brian also hints of further
potential technology step-out in FLNG once the first wave of projects is successfully commissioned.
The lessons of the post-2009 period have, it can be argued, demonstrated the need for the LNG
industry to address both cost base and contractual price formation mechanisms if it is to remain a
viable channel for the delivery of gas in the worlds fast growing markets.
The Oxford Institute for Energy Studies Natural Gas Programme is pleased to add this paper to its list
of publications which aim to address the key issues impacting the market fundamentals, geo-politics
and pricing. Whether FLNG provides a more viable supply-side renaissance for LNG is still to be
proven; this paper provides a valuable description of the challenges and motivations of the players
involved.
Howard Rogers
Oxford October 2016
iii
October 2016: Floating Liquefaction (FLNG): Potential for Wider Deployment
Contents
Acknowledgements .............................................................................................................................. ii
Preface .................................................................................................................................................. iii
Glossary ................................................................................................................................................ vi
Chapter 1 ................................................................................................................................................ 1
1.1 Context & Reason for Paper ......................................................................................................... 1
Chapter 2 ................................................................................................................................................ 3
2.1 FLNG Configurations .................................................................................................................... 3
2.2 Inshore/Nearshore ........................................................................................................................ 3
2.3 Offshore ........................................................................................................................................ 3
Chapter 3 ................................................................................................................................................ 5
3.1 FLNG Technology ......................................................................................................................... 5
3.2 Gas Processing & Liquefaction ..................................................................................................... 5
3.3 FLNG Liquefaction Processes ...................................................................................................... 6
Advantages & Disadvantages .......................................................................................................... 7
Mixed Refrigerant Process (MR) ..................................................................................................... 8
Nitrogen Refrigerant Process (N2) ................................................................................................... 8
3.4 LNG Storage & Offloading ............................................................................................................ 8
3.5 Accommodation & Utilities ............................................................................................................ 9
Chapter 4 .............................................................................................................................................. 10
4.1 Capital Costs (CAPEX) ............................................................................................................... 10
Prelude ........................................................................................................................................... 10
Browse ........................................................................................................................................... 11
Knowit & Rotan .............................................................................................................................. 11
Hilli,, Gimi and Gandria .................................................................................................................. 11
Caribbean FLNG ............................................................................................................................ 11
Port Lavaca .................................................................................................................................... 11
Pandora ......................................................................................................................................... 12
Cost Comparison of the FLNG Offerings ....................................................................................... 12
Cost Comparison with Onshore Plants .......................................................................................... 12
4.2 Operating Costs (OPEX) ............................................................................................................. 13
Personnel on board........................................................................................................................ 13
Fuel gas ......................................................................................................................................... 13
Consumables ................................................................................................................................. 13
Maintenance .................................................................................................................................. 13
Tug and Support Vessels .............................................................................................................. 14
Supply base costs including supply vessels and helicopters ........................................................ 14
Insurance ....................................................................................................................................... 14
OPEX Estimate .............................................................................................................................. 14
Production Cost & Value Chain ..................................................................................................... 14
4.3 Development Schedule ............................................................................................................... 15
Chapter 5 .............................................................................................................................................. 16
5.1 Commercial Considerations ........................................................................................................ 16
5.2 Project Financing ........................................................................................................................ 16
Chapter 6 .............................................................................................................................................. 18
6.1 SWOT Analysis ........................................................................................................................... 18
6.2 Strengths ..................................................................................................................................... 18
6.3 Weaknesses ................................................................................................................................ 19
6.4 Opportunities ............................................................................................................................... 20
6.5 Threats ........................................................................................................................................ 20
Chapter 7 .............................................................................................................................................. 21
7.1 Small to Mid-Scale Solution Providers ........................................................................................ 21
iv
October 2016: Floating Liquefaction (FLNG): Potential for Wider Deployment
Exmar ............................................................................................................................................. 21
Golar LNG ...................................................................................................................................... 21
SBM Offshore ................................................................................................................................ 21
BW Offshore .................................................................................................................................. 22
Bumi Armada ................................................................................................................................. 22
MODEC .......................................................................................................................................... 22
Hegh LNG .................................................................................................................................... 22
Excelerate Energy.......................................................................................................................... 22
Flex LNG ........................................................................................................................................ 23
Chapter 8 .............................................................................................................................................. 24
8.1 Market Impact ............................................................................................................................. 24
Chapter 9 .............................................................................................................................................. 26
9.1 Conclusions ................................................................................................................................. 26
Current Projects & Prospects ........................................................................................................ 26
Advantages & Disadvantages ........................................................................................................ 26
Commercial Considerations ........................................................................................................... 26
Looking Forward ............................................................................................................................ 27
Appendix 1 First Inshore Barge 1959 ............................................................................................. 28
Appendix 2 List of FLNG Developments ....................................................................................... 29
Appendix 3 FSRU Projects .............................................................................................................. 30
Bibliography ........................................................................................................................................ 31
Figures
Figure 1: Typical Inshore/Nearshore Configuration ................................................................................ 3
Figure 2: Typical Offshore Configuration ................................................................................................ 4
Figure 3: Typical FLNG Arrangement ..................................................................................................... 5
Figure 4: Liquefaction Process Selection ............................................................................................... 7
Figure 5: Production Density ................................................................................................................... 8
Figure 6: INDICATIVE FLNG CAPEX (VESSEL ONLY) ...................................................................... 10
Figure 7: Current FLNG Schedules in Months ...................................................................................... 15
Figure 8: FLNG Prospects by Country .................................................................................................. 24
Figure 9: The First Inshore LNG Barge ................................................................................................. 28
Tables
Table 1: FLNG Projects Currently under Construction ........................................................................... 1
Table 2: Comparison of MR & N2 Processes .......................................................................................... 7
Table 3: OPEX Cost Estimate for 2.5 mtpa .......................................................................................... 14
Table 4: SWOT Analysis ....................................................................................................................... 18
v
October 2016: Floating Liquefaction (FLNG): Potential for Wider Deployment
Glossary
Bcfd Billion Cubic feet per day. A flowrate or production output of typically natural gas commonly
used in North America.
Bcma Billion cubic metres per annum. A flowrate or production output of natural gas commonly
used internationally.
Capex or CAPEX Industry term for Capital Expenditure.
DMR Dual Mixed Refrigerant
EPC Engineering, Procurement and Construction
FEED Front End Engineering Design
FID Final Investment Decision Typically made by the investors in an LNG project when all
necessary sales contracts and other government and regulatory approvals are in place.
FLNG Floating LNG liquefaction vessel
FPSO Floating Production Storage & Offloading
FSRU Floating storage and regasification vessel
LNG Liquefied Natural Gas
Liquefaction The process by which pre-treated natural gas is cooled to minus 1600 Celsius when it
becomes a liquid at atmospheric pressure.
m3/h Cubic metres per hour
mtpa Millions of tonnes per annum
mtpa/ha LNG production in million tonnes/annum per hectare of vessel deck space
Natural Gas Liquids Typically the ethane, propane, butane and higher alkanes occurring within a
natural gas reservoir extracted from the methane in the course of processing it to grid or liquefaction
specification.
OLAF - Offshore Loading Arm Footless
OPEX Industry term for Operating Expenditure
SMR Single Mixed Refrigerant
SPB - Single Prismatic Type B tanks
Sponson - A feature on a vessel that extends from the hull to aid stability while floating and provide
space for additional other equipment.
tpa - Tonnes per annum
$ - US Dollar
$/tpa metric of capital cost/tonne/annum calculated by dividing the capital cost by the production
rate in tonnes/ annum
vi
October 2016: Floating Liquefaction (FLNG): Potential for Wider Deployment
Chapter 1
Caribbean
0.5 2016 TBA Exmar Exmar/Wison/B&V
FLNG
Kanowit Field,
PFLNG Satu 1.2 2016 Petronas Technip/DSME
Sarawak, Malaysia
Timor Sea,
Prelude 3.6 2017 Shell Technip/Samsung
Australia
Rotan Field,
PFLNG22 1.5 2020 Petronas JGC/Samsung
Sabah, Malaysia
Source: Collated by author from various industry sources
It is worthy of mention that an inshore small capacity FLNG barge was installed and successfully
operated in 1959 in Louisiana and supplied the first LNG to the Canvey Island terminal in the UK.
More information is included in Appendix 1.
The concept of floating liquefaction development follows closely behind the successful deployment of
floating storage and regasification units (FRSUs) which have been accepted by the industry at an
impressive pace. The first FSRU vessel was installed in the Gulf of Mexico in 2005 and by mid-2016,
19 vessels were in operation with many more on order (refer to Appendix 3). Such a rapid take up of
new enabling technology in the LNG industry is quite unprecedented. It will be interesting to see if
FLNG progresses at the same rate.
Currently 24 FLNG developments are in progress 7 in construction and 17 in the planning/pre-
engineering stage as listed in Appendix 2.
1
Final Invest Decision expected mid 2016 but construction (conversion) is underway. See Quinn (2016) pp 29 - 32
2
Delay to 2020 announced in April 2016, probably due to low current energy prices
http://fairplay.ihs.com/commerce/article/4263426/petronas-delays-rotan-flng-project
1
FLNG offers many advantages over conventional onshore liquefaction plants:
Can be located at the offshore field avoiding the high cost of a subsea pipeline to shore.
Can be built in a shipyard with higher productivity and often lower labour rates than the
construction of a conventional onshore liquefaction plant.
Shipyard construction provides a higher confidence in delivery date than many onshore
construction locations.
Avoids onshore permitting issues which can be expensive and often result in delays.
Can be leased avoiding the initial capital outlay.
Can be redirected to another field when gas production declines enabling the asset to be reused
and avoiding the full sunk cost experienced with an onshore plant which cannot be relocated.
90% of the commissioning can be completed in controlled shipyard conditions prior to installation.
FLNG has every potential to be a game changer for the liquefaction industry from both technical and
commercial stand points in the same way as FPSOs 3 have enabled the economic development of
remote offshore oil fields.
The opportunity provided by the FSRU and FPSO contractors to lease the FLNG vessel enables the
smaller independent energy companies to avoid arranging project finance for the liquefaction facility
and carrying the asset on their balance sheet and a good example of this is the Fortuna project 4.
However it could also assist the major energy companies where current low oil prices are restricting
capital investment. Many major energy companies already lease FPSOs 5 and the same could equally
apply to FLNGs.
Golar LNG has secured financing for its first FLNG vessel and has three FLNG vessels under
construction in Singapore and a possible fourth6 is to be announced a measure of how it feels this
approach will be taken up by the industry. Three of these vessels have already been assigned to
offshore gas field developments. Golar LNG has also just announced a joint venture with
Schlumberger OneLNG7 that will offer to supply, operate and finance the complete offshore scope
reservoir, subsea and FLNG facility. This will be of particular interest to the smaller independent
energy companies who have limited technical and financial resources.
3
Floating Production, Storage and Offloading unit.
4
Quinn (2016) pp 29-32
5
See list compiled by FPSO company at: http://fpso.com/fpso/?page=2 [Looks as if the company is called Intership Pte Ltd?]
6
Fourth FLNG conversion announced by Golar LNV at: http://www.lngworldnews.com/golar-starts-fourth-flng-conversion-talks-
with-keppel/
7
http://www.slb.com/news/press_releases/2016/2016_0725_slb_golar_onelng.aspx
2
Chapter 2
2.2 Inshore/Nearshore
Inshore or Nearshore FLNGs are located in relatively benign water conditions with the protection of a
harbour or breakwater and are not exposed to harsh open ocean sea states. An example of inshore
configuration is shown in figure 1 with the vessel moored to a jetty. With these configurations the feed
gas is normally supplied by pipeline from the producing field, which may be on- or offshore.
Figure 1: Typical Inshore/Nearshore Configuration
2.3 Offshore
Offshore FLNGs are located in open water and exposed to the prevailing sea state conditions for that
location. An example offshore configuration is shown in figure 2. For relatively benign waters e.g.
Prelude8 (Browse Basin, Australia), LNG will be exported using an OLAF 9 system based on a proven
hard arms design with the vessels located on a side-by-side basis. However, harsher conditions e.g.
Scarborough, (remote Carnarvon Basin, Australia) will require a tandem offloading arrangement 10 with
the vessels located one behind the other as used for oil offloading from FPSOs in harsh conditions. It
should be noted that whilst Prelude is in normally benign conditions, the facility must be structurally
designed to withstand the harsh category 5 cyclone conditions experienced in that area albeit the
facility will cease operations for the duration of those conditions.
8
Shell Prelude Project Description pp 4 , http://s00.static-shell.com/content/dam/shell-new/local/country/aus/downloads/about-
shell/prelude/chap4highres.pdf
9
OLAF Offshore Loading Arm Footless http://www.lngworldnews.com/olaf-by-fmc-video/
10
Scarborough Project, Preliminary Environmental Documentation Report, September 2013,
http://www.exxonmobil.co.uk/Australia-English/PA/Files/scarborough_enviro_final.pdf
3
Figure 2: Typical Offshore Configuration
It should be noted that the main limitation of the offshore location is the LNG offloading system. Hard
arms are the only currently proven system and are limited to a significant wave height of
approximately 2.5 m which restricts the applications to relatively benign offshore locations e.g. Timor
Sea, West Africa, East Africa and Malaysia. Operation in harsher environments e.g. offshore Brazil
(South Atlantic) will only be feasible when tandem loading has been proven for LNG transfer to the
satisfaction of the operators. Tandem loading systems have been developed and qualified and this is
discussed further in section 3.4.
4
Chapter 3
The FLNG industry has deliberately retained as much proven onshore process technology as possible
to minimise the technical risks. More innovative process concepts may be developed at a later date
when the first group of vessels have demonstrated reliable operation for some time and more
experience is gained.
5
The well fluids are transported from the subsea wells via risers to the inlet treatment facilities in the
same manner as for oil FPSOs. The risers in all current offshore developments are routed via a turret
to allow to allow the vessel to turn into the wind for better stability, but other configurations e.g. spread
moorings as used in West Africa, (on oil FPSOs), are possible. The well fluids are separated into gas
and condensate. The condensate is stabilised prior to storage in the hull and normally exported via
hoses to appropriate tankers.
The gas stream is treated with an amine solution to remove the acid gas (CO2 and possibly H2S)
which would otherwise freeze in the liquefaction process. Amine is regenerated by heating and the
acid gas vented.
Water is then removed using molecular sieve beds and finally any mercury removed in a guard bed.
The gas stream is then cooled to extract LPG (propane & butane) which is sent to storage in the hull
and exported via hard arms or hoses.
The treated gas comprising mainly methane and ethane is cooled to -1620C in the cryogenic heat
exchanger and liquefied. The resulting LNG is flashed to remove the excess nitrogen and stored in
the hull prior to export via offloading arms.
The main differences between FLNG and onshore liquefaction are:
A much smaller plot space is available typically just 60% of an onshore plant;
The need to accommodate vessel motions of heave, surge, pitch, roll & yaw;
The manoeuvring of two moving vessels alongside each other for LNG offloading;
The use of modularised plant rather than stick built 11, but modular onshore plants are now being
used in areas where construction labour is limited or expensive;
Higher operations and maintenance costs due to offshore logistics;
The need for the plant to be compact and low weight;
Continuous offshore operation with no dry-docking for major overhauls requiring higher design
margins and high quality equipment to minimise the need for in-service repair and replacement.
11
Traditional plant construction method where equipment and materials are delivered to site as individual components and
erected at site
6
Figure 4: Liquefaction Process Selection
Source: By author
Note: DMR = Dual Mixed Refrigerant; SMR = Single Mixed Refrigerant .
7
Figure 5: Production Density
Kanowit
Prelude
12
Article Double Mixed Refrigerant LNG Process provides viable alternative for tropical conditions, Oil & Gas Journal
(subscription service) at: http://www.ogj.com/articles/print/volume-100/issue-27/processing/double-mixed-refrigerant-lng-
process-provides-viable-alternative-for-tropical-conditions.html
13
See Black & Veatch brochure World-Class LNG Capabilities at http://bv.com/docs/energy-brochures/lng
14
See short Air Products paper Simulating Operational transitions in a Nitrogen Recycle LNG Plant at:
http://www.airproducts.com/~/media/Files/PDF/industries/lng/en-simulating-operational-transitions-nitrogen-recycle-lng-
plant.pdf
15
See description of membrane containment system on NWS website at: http://www.nwsssc.com/fleet/ship-technical-
information/membrane-containment-system
16
See description of Moss spherical tanks on Mossmaritime website at:http://www.mossww.com/technologies/lng_carriers.php
8
FLNG use type C tanks17 (pressure vessels) but this is not economic for larger vessels. SPB 18 tanks
are also an option and were considered by Flex LNG, but while they are extremely robust they are
considerably more expensive than the membrane type.
The offloading method being used on the projects currently under construction is the proven approach
of loading arms with side-by-side transfer19. There is a desire by the industry for tandem loading using
either articulated arms20 or hoses21. Hoses are currently used for side-by- side transfer but not for
tandem or floating in the water. Four 16 aerial cryogenic hoses are currently being offered by
Technip, Nexans, Trelleborg and Dunlop. The Technip, Nexans and Trelleborg hoses are fully
qualified and Dunlop expects their hose to be qualified by late 2016. A 20 floating hose is currently
being offered by Trelleborg and has been fully qualified. The 16 aerial hoses can each transfer 5,000
m3/h and would be supported by a deployment frame with the hoses connecting the stern of the FLNG
with the bow of the offloading tanker as a catenary. The 20 floating hose is also capable of
transferring 5,000 m3/h but would be longer running from the stern of the FLNG to the mid-ships
manifold on the tanker. In addition to tandem arrangements Sevan Marine has developed the HiLoad
LNG22 concept which uses a self-propelled L-shaped unit to latch on to the tanker. A recent article23
in Upstream Technology provides an update of these flexible hose developments.
Condensate and LPG are also stored in the hull and exported. LPG is normally exported using hard
arms and condensate using hoses.
17
See article on C Cargo tanks at: http://worldmaritimenews.com/archives/98464/tge-marine-delivers-c-cargo-tanks-for-exmars-
lng-flsru-china/
18
Single Prismatic Type B tanks - See article on SPB LNG carriers at: http://www.ihi.co.jp/offshore/spbmenu_e.htm
19
OLAF system used on Prelude has been fully tested prior to delivery, see description at:
http://fuelfix.com/blog/2014/05/08/otc-spotlight-award-fmc-technologies-offshore-footless-loading-arm/#23039101=0
20
See description at: http://www.fmctechnologies.com/en/LoadingSystems/MarineSolutions.aspx
21
See description at: http://www.trelleborg.com/en/fluidhandling/products--and--solutions/offshore--oil--and--gas--
hoses/gas/cryoline--lng
22
http://www.sevanmarine.com/solutions/hiload-lng
23
http://www.upstreamonline.com/hardcopy/technology/article1443757.ece
9
Chapter 4
Prelude 2000
Browse 1538
Rotan 827
Kanowit 967
Prelude
Industry sources indicate the cost of the 3.6 mtpa Prelude project to be around $12 billion 25 giving a
project metric cost of $3,300/tpa ($11.7/MMBtu 26). Assuming the FLNG facility (vessel) represents
24
A metric used for comparison calculated by dividing the capital cost in US$ by the LNG production rate in tonnes per annum.
25
Article Shells Prelude FLNG Project: An Offshore Revolution?, Peter Staas, Investing Daily, June 3 rd 2011,
http://www.investingdaily.com/13544/shells-prelude-flng-project-an-offshore-revolution/
26
Using a conversion factor of $/tpa to $/MMBtu of 0.35%. This factor of 0.35% CAPEX is a typical industry figure and is
calculated by spreading the project capital cost including interest over an agreed production period.
10
60% of the total project cost gives a metric of $2,000/tpa ($7.0/MMBtu). If the total fluids production of
5.4 mtpa is used (LNG + LPG + Condensate) this reduces to $1,385/tpa ($4.8/MMBtu).
Browse
A budget cost of $30 billion 27 has recently been reported for 3 x 3.9 mtpa FLNG facilities, which
represents a project metric of $2,564/tpa ($8.97/MMbtu). Assuming the same 60% for the FLNG
facility only (vessel) gives a metric of $1,538/tpa ($5.4/MMbtu). This cost is lower than Prelude and
aligns with Shells statement of significantly reducing the costs during the conceptual design.
Caribbean FLNG
Exmar has quoted similar costs to Golar LNG for its Caribbean FLNG vessel 34. Black and Veatch in
their OTC paper35 quotes a barge cost of $220/tpa but this on a 2012 basis. Adding escalation to
2016 plus the inshore jetty and the FSU for storage would indicate an overall cost of ca. $500-
600/tpa.
Port Lavaca
Excelerate Energy originally developed its concept as an inshore FLNG for Port Lavaca in Texas at a
cost of $2.5 billion36 to produce 4 mtpa ($568/tpa). Its offshore concept was quoted at $700/tpa. The
27
Article Woodside scraps Browse LNG in Australia amid global oversupply, Sonali Paul, Gas Processing, March 23rd, 2016,
http://gasprocessingnews.com/news/woodside-scraps-australia%E2%80%99s-browse-lng-amid-global-oversupply.aspx
28
Article in Petronas in-house magazine at: http://www.petronas.com.my/our-
business/Upstream/Documents/PETRONAS%20flow,%20Volume%2002.pdf
29
Project description on offshore technology website at: http://www.offshore-technology.com/projects/pflng-2-rotan-flng-project-
sabah/
30
Article on Golar Cameroon project on Golar LNG website at:
http://www.golarlng.com/index.php?name=seksjon/Stock_Exchange_Releases/Press_Releases.html&pressrelease=1955666.h
tml
31
Article on Golars FLNG conversion on Poten website at: http://www.poten.com/wp-content/uploads/2015/01/Golar-Pushes-
Forward-With-First-Ever-FLNG-Conversion.pdf
32
Article on Gimi FLNG project on Rigzone website at:
http://www.rigzone.com/news/oil_gas/a/136592/Keppel_Shipyard_Bags_705M_FLNGV_Conversion_Contract_from_Golar_LN
G
33
Article on Gandria FLNG project at: http://www.offshoreenergytoday.com/keppel-bags-flng-deal-from-golar-worth-684m/
34
Article on Caribbean FLNG project on LNG Industry website at: http://www.lngindustry.com/floating-
lng/12032014/Wison_to_deliver_FLNG_concept_study_for_Cott_275/
35
Talib & Price (2013)
36
See article on project being halted, Argus, 2nd September 2015 at:
http://www.argusmedia.com/pages/NewsBody.aspx?id=1097475&menu=yes
11
higher cost for the offshore vessels is due to the inclusion of additional inlet gas treating and a slightly
lower production rate.
Pandora
Wison has undertaken studies for Pandora FLNG 37 proposed for the Gulf of Papua and estimates the
vessel costs to be $600/mtpa for the nearshore option and $700 for the offshore option.
37
See project presentation at:
http://www.cottoilandgas.com.au/files/8714/0236/3949/Cott_Feasibility_Study_Presentation_Final_Issued.pdf
38
See short Shell paper A High Capacity Floating LNG Design at: http://www.gastechnology.org/Training/Documents/LNG17-
proceedings/12-1-Barend_Pek.pdf
39
See Woodside announcement of April 2015 at: http://www.woodside.com.au/Our-
Business/Developing/Documents/FLNG%20browse%20fact%20sheet.pdf
40
See Analyst presentation at: http://media.corporate-
ir.net/media_files/IROL/10/101667/Analyst_Day_Presentation_WEBrev.pdf
41
See Songhurst (2014) Page 29
42
See Gaffney Cline Presentation at: http://www.gaffney-
cline.com/downloads/east_africa_workshop/Major%20Gas%20Projects%20Development%20Plans%20and%20Costs.pdf
12
either inshore or offshore applications. This is demonstrated by ENIs decision to look at a FLNG
solution for Coral South43 where it is considering two FLNG vessels to operate as an early production
system ahead of the onshore plants.
Personnel on board
The number of people on board depends on the size and complexity of the vessel. On a large and
highly complex facility like Prelude, which includes LPG and condensate production, this would be
around 170 on a regular basis and increasing to 340 during start-up and maintenance. A middle range
2 mtpa vessel is likely to have 100-140 people on board. For a simple nearshore facility such as
Exmars Caribbean FLNG this will be less.
Fuel gas
Fuel gas consumption is typically 10-12% of the feed gas depending on the liquefaction process used.
It should be noted that fuel consumption will be higher than in onshore plants due to the need to
power the marine systems. This consumption figure is often referred to as shrinkage, being the
difference between the feed gas and LNG produced. The main user will be the gas compressor
drivers i.e. gas turbines or steam boilers for steam turbine drivers. In addition, gas will be used for
power generation as well as other small fuel gas users. The cost of the gas is accounted for very
differently by different energy companies. Some regard it as a zero cost item as it is owned by the
energy company and if not used now would be produced in 20 years at a very low discounted value.
Others regard it as a lost opportunity cost and will charge it at LNG cost. This paper assumes a cost
of $5/MMBtu but this could be higher for deep water developments.
Consumables
This covers the make-up of refrigerants losses, lubricating oil, diesel oil, chemicals and similar items.
For some processes the refrigerants may be extracted from the feed gas but this will depend on the
composition i.e. extraction of propane and butane.
Maintenance
This includes the ongoing maintenance of the vessel and the subsea systems handled by the crew
plus the major overhauls expected every 3-4 years, which will require additional personnel. It is not
economic to return the FLNG to a shipyard due to the high cost of disconnection, decommissioning
and downtime to sail to and from a shipyard.
43
Article Eni's Coral FLNG development plan approved by Mozambique, 26th February, 2016, World Oil,
http://www.worldoil.com/news/2016/2/26/enis-coral-flng-development-plan-approved-by-mozambique
13
Tug and Support Vessels
A minimum of two and possibly three tugs will be required to manoeuvre the shuttle tanker alongside
the FLNG vessel for offloading. These tugs would probably be dedicated to the project as it may not
be practical to return to port between offloading, depending on the offloading frequency. A 2.5 mtpa
vessel offloading to a 140,000 m 3 tanker will require approximately 39 ships/year (three/month).
Security and standby vessels will also be required.
Insurance
Insurance rates for new technology are subject to negotiation. The rate for FLNGs is likely to be
higher than onshore plant, which typically costs 0.03-0.07% of the site value.
OPEX Estimate
Recent proposals by the solution providers for a 2.5 mtpa vessel indicated an OPEX of $250,000/day
i.e. approximately $90 million/year excluding fuel cost. Feed gas will be used as fuel at a typical rate
of 12% of the feed rate and assuming $5/MMBtu adds a further $69 million/year. This total OPEX of
$159 million/year represents $1.3/MMBtu as shown in table 3.
Table 3: OPEX Cost Estimate for 2.5 mtpa
$
Component m/year
Manning (100 people) 10 100,000 $/year per person
Maintenance 45 3% CAPEX
Consumables refrigerant make-up, lubricants & chemicals 5
Tugs, Support, Security Vessels 10 3 Tugs
Base Support, Helicopters 10
Miscellaneous 10
Sub total excl fuel 90
Fuel Gas (12% Gas Feed) 69 5.0 $/mmbtu
Total 159
OPEX 1.3 $/mmbtu
Source: By author based on proposals
44
See Wison offers Pandora FLNG concepts, Offshore Engineer, 2nd June, 2014,
http://www.oedigital.com/vessels/flng/item/5795-wison-presents-pandora-lng-concepts
14
4.3 Development Schedule
Figure 7 shows the overall EPC schedules for the FLNG projects currently being built. They range
from just 32 months for the simple Caribbean FLNG inshore barge to 66 months for the complex
Prelude facility. The Kanowit vessel is also complex and 42 months is probably representative of mid-
sized vessels (ca. 2 mtpa). Caribbean FLNG, Kanowit and Prelude are new builds whereas the Golar
Hilli and Gimi vessels are LNG tanker conversions
These schedules cover the EPC phase only i.e. duration from the final investment decision to
completion of construction and do not include pre-FID activities e.g. planning, permits, conceptual
engineering, arranging project financing, nor the post construction activities of towing to site,
installation and commissioning. Onshore plants typically take 48-60 months to construct.
Figure 7: Current FLNG Schedules in Months
Caribbean FLNG 32
Petronas Kanowit 42
Shell Prelude 66
0 10 20 30 40 50 60 70
Source: By author from published data
The extent to which FLNG can offer a schedule saving over an onshore development is project and
location specific. However, reduced schedule risk will likely be a more significant factor in choosing a
shipyard fabricated FLNG than an onshore constructed plant which frequently experience delays. The
Korean shipyards have a good track record of delivering major projects on time (and on budget) but
the same cannot be said of many onshore projects which can suffer from extreme weather conditions,
limited infrastructure, limited resources (particularly when in competition with other projects) and poor
industrial relations45.
FLNG may also offer significant schedule savings in obtaining the necessary consents, which can be
a lengthy process for greenfield onshore developments. An offshore moored FLNG vessel has
relatively little social and environmental impact when compared with an onshore plant.
45
See Ledesma, Palmer and Henderson (2014)
15
Chapter 5
46
Refer to Exmar Finds Funding for Caribbean FLNG, World Maritime News, 7th April 2016:
http://worldmaritimenews.com/archives/164622/exmar-finds-funding-for-caribbean-flng/
47
See EXIM bank is among the early financiers of FLNG, HIS Fairplay: http://fairplay.ihs.com/article/13485/flng-projects-face-
financing-challenges
48
Golar LNG gets $960M financing for Golar Hilli conversion, Refer to Seeking Alpha: http://seekingalpha.com/news/2642485-
golar-lng-gets-960m-financing-for-flng-conversion
49
For more information on Golar enters Into agreements for 3rd Floating Liquefaction Facility, refer to Golar website:
http://www.golarlng.com/index.php?name=seksjon/Stock_Exchange_Releases/Press_Releases.html&pressrelease=1940318.h
tml
50
http://www.slb.com/news/press_releases/2016/2016_0725_slb_golar_onelng.aspx
16
will be of particular interest to the smaller independent energy companies who have limited technical
and financial resources. This is discussed further in section 7.1.
Excelerate Energy51 has stated that FLNG projects also offer new financial challenges. According to
Excelerate chief executive Rob Bryngelson, Projects are likely to be only 50-60% debt financed,
rather than the 70-80% debt financing we see with onshore liquefaction projects. This means that
early projects will have to be funded by more equity financing than their onshore counterparts.
51
FLNG projects to accelerate addition of new supply New Importers, Argus article 29th April, 2013:
http://www.argusmedia.com/pages/NewsBody.aspx?id=844756&menu=yes
17
Chapter 6
6.2 Strengths
World scale onshore plants tend to be designed as multiple 4-5 mtpa trains whereas FLNG offers a
wider range of train size e.g. from Caribbean FLNG at 0.5 mtpa up to Prelude at 3.6 mtpa.
Further FLNG units can be leased or contracted on a tolling basis improving cash flow for the energy
company e.g. Ophir Fortuna and not carrying the asset on the balance sheet.
The other major cost advantage is avoiding the need for a subsea pipeline to shore. An example of
this is the Ichthys project where the 890 km x 42 pipeline to Darwin required 700,000 tons of steel.
Such pipelines cost in excess of $1 billion and can be avoided by using FLNG.
Small to mid-scale FLNG can typically be delivered quicker due to shipyard manufacturing techniques
and typically with a higher schedule confidence than onshore constructed plants. Traditional onshore
plants can often be delayed due to local labour problems or take longer due to the need to build the
required infrastructure.
18
FLNG with possible lower capital costs, the opportunity to lease or toll and faster schedule should
enable earlier monetisation of the gas assets and improve cash flow.
FLNG also provides a solution where land onshore is not available or difficult to develop due to
permitting issues. An example of this is the possible development of the gas fields just 80 km offshore
Israel where space is not readily available along the highly developed coastline.
6.3 Weaknesses
FLNGs are currently not suitable for harsh environments where tandem offloading, as used for oil
FPSOs, is required. Current proven technology limits offloading to the use of hard arms in a side-by-
side configuration. This limits offloading operations to a significant wave height of approximately 2.5
metres and may negatively impact availability. Several cryogenic tandem transfer systems have now
been developed and qualified as discussed in section 3.4. Tandem offloading employing stern-bow
loading systems will require dedicated LNG carriers with bow loading manifolds and dynamic
positioning capability. The use of a floating hose may require the mid-ship manifold to be
strengthened to take the additional load.
FLNGs are not suitable for very large developments due to shipyard limitations on the size of hull that
can be built. FLNG developments up to 7.5 mtpa against 4 mtpa currently are being considered e.g.
Abadi, 7.5 mtpa and Scarborough 6-7 mtpa. In addition, whereas onshore plants may add additional
liquefaction trains, incremental expansion of FLNG units is not possible without taking the entire
facility out of service for a considerable period of time. However, it is possible to add multiple repeat
FLNG units but this will not offer any economy of scale as for onshore plants.
Low local content is another potential drawback as construction is almost exclusively out of country.
Many developing countries view LNG projects as a major opportunity for local employment, with
thousands of people employed during construction of an onshore plant. FLNG limits local employment
opportunities to the operational phase which will not meet the required expectations of many
developing or developed countries which promote the use of their in-country labour resources e.g.
Brazil, Indonesia and Nigeria.
Offshore OPEX will be higher than onshore due to increased logistics costs and the requirement for
various support vessels to service the facility. Potential CAPEX savings will be offset by the higher
OPEX over the life cycle of the project. However, CAPEX is very often king when FIDs are made.
The banks are still reluctant to finance FLNG due to the perceived risks of first of a kind
developments but this appears to be changing. The Caribbean FLNG was in part financed with US
Exim and Sinosure support and Golar LNG have recently announced financing arrangements for the
Hilli and Gimi conversions. This is a positive step and financing is likely to become easier when
operating experience of the first units becomes available from 2016 onwards.
Concerns have been expressed over the field life expectancy of FLNGs developed as LNG tanker
conversions. However it has been pointed out that the tanks are in excellent condition and the hull will
be reinforced. Furthermore, the processing plant will be new and located on new deck space created
by adding floating side structures (sponsons).
Finally, many have regarded the liquefaction process as being too complicated for offshore
application. FLNG vessels are certainly more complicated than major FPSOs but, following many
years of major studies including physical equipment modelling and pilot unit testing, the companies
now constructing these vessels feel these issues have been solved. However the industry is waiting
to see how they perform in practice.
19
6.4 Opportunities
The major opportunity for FLNG is the monetisation of offshore gas fields that cannot be otherwise
developed due to high cost of a pipeline to shore or the lack of a suitable onshore location due to land
issues, permitting issues or lack of infrastructure. Also FLNG can offer the possibility of lower
production costs and earlier production improving the project economics. The option to lease will
enable smaller independent energy companies with limited capital to enter the market and meet the
increasing world-wide demand for gas. FLNG also provides the opportunity to convert retired Moss
LNG carriers into small to mid-scale floating liquefaction units. Moss tanks are ideal for offshore
application due to the lack of sloshing issues and process plant can be added by way of sponsons as
proposed by Golar LNG for the GoFLNG concept. Finally FLNG provides financing opportunities for
the banks albeit they have been somewhat reluctant to date due to FLNG being new technology but
this appears to be easing.
6.5 Threats
Low oil indexed and spot gas prices are a major threat for both FLNG and onshore plants. Assuming
future higher prices, there is an opportunity to place an order now with a competitive shipyard,
although a mid-scale 2.5 mtpa FLNG will likely take 48 months to construct.
Shipyard capacity is a possible threat for larger FLNGs due to the limited number of large dry docks
available but China is keen to enter the market and the existing shipyards are likely to add larger dry
docks if there is market opportunity. There is also the threat of other shipbuilding and module
construction work becoming more profitable and less risky.
FLNG is a combination of cryogenic process plant engineering and marine engineering and only a
limited number of contractors have those combined skill sets in-house. There are many very capable
onshore cryogenic contractors but they will need to ensure their designs reflect the knowledge of
offshore plant operation and maintenance, which has been learnt by the major FPSO contractors over
many years. This knowledge must be incorporated into the design to ensure the vessels work
efficiently and, more importantly, safely a poorly executed project would likely set back the FLNG
business and would not be helpful in increasing the confidence of the banks to provide finance.
20
Chapter 7
Exmar
Exmar52, a specialised maritime logistics company based in Belgium, offers energy solutions to the oil
and gas industry. It owns 5 LNG tankers, 10 FSRUs and the 0.5 mtpa Caribbean FLNG. A second
prospective 0.6 mtpa FLNG vessel is under construction. Exmars FLNG strategy is the same as for
the FSRU market build, own and operate and focus on new build FLNG vessel of smaller capacities
(0.5-0.6 mtpa).
Golar LNG
Golar LNG53,54 is based in Norway and operates 20 LNG tankers of which nine have been added to
the fleet in the last two years, and four FSRU vessels with three more in construction. It is currently
converting three of its LNG tankers into FLNG vessels Hilli, Gimi and Gandria - and is in discussions
regarding the conversion of a fourth vessel. Its strategy is conversion of its existing vessels by
installing sponsons on the side of the tanker for the installation of the liquefaction plant. To date three
vessels have been based on adding four liquefaction trains of a nominal 0.6 mtpa each, providing a
production capacity of 2.4 mtpa. Its approach is a standard design that can be reused rather than
being project specific.
Golar LNG has recently announced a joint venture with Schlumberger referred to OneLNGSM 55 to
rapidly develop low cost gas reserves. This will combine Schulmbergers reservoir knowledge,
wellbore technologies and production management skills with Golar LNGs FLNG skills to provide a
one stop shop. This will be ideal for the smaller independent energy companies with limited in-house
resources. OneLNGSM is also looking to provide project financing. They have stated that they expect
to conclude 5 projects in the next 5 years.
SBM Offshore
SBM Offshore56 is based in the Netherlands and provides FPSO solutions to the offshore energy
industry, over the full product life-cycle and has multiple units in operation. The Companys main
activities are the design, supply, installation, operation and the life extension of FPSO vessels. These
52
Refer to Exmar Floating LNG - FLNG home page: http://www.exmar.be/en/activities/lng/floating-liquefaction-flng
53
Refer to Golar LNG Floating Liquefaction (FLNG) home page:
http://www.golarlng.com/index.php?name=Our_Business%2FFloating_Liquefaction.html
54
See Golar press release Cameroon FLNG Project Reaches Major Milestone 30th September 2015:
http://www.golarlng.com/index.php?name=seksjon/Stock_Exchange_Releases/Press_Releases.html&pressrelease=1955666.h
tml
55
http://www.slb.com/news/press_releases/2016/2016_0725_slb_golar_onelng.aspx
56
Refer to SBM home page http://www.sbmoffshore.com/who-we-are/company-profile/
21
are either owned and operated by SBM Offshore and leased to its clients or supplied on a turnkey
sale basis. For the FLNG market it is offering a mid-sized (1.5-2.0 mtpa) twin hull FLNG 57 using
converted Moss tankers.
BW Offshore
BW Offshore, based in Norway, is one of the major FPSO providers and has 25 years' experience. It
has delivered 13 FPSO projects and 50 turrets and offshore terminals. It is currently working with
Pangea LNG and pursuing the Noble King project in Israel 58. It also operates 17 LNG tankers with 4
more under construction. Sister company BW Gas has just supplied the second FSRU (BW
Singapore) for Ain Sokhna and a further FSRU will be supplied for the second Port Qasim terminal in
Pakistan further establishing itself in the LNG supply chain.
Bumi Armada
Bumi Armada Berhad (Bumi Armada) is a Malaysian based international offshore oil and gas
services provider and has a fleet of 6 oil FPSOs. It has recently entered the LNG market with the
award of the Malta LNG FSU project and has been working with Keppel and IHI on possible FLNG
concepts59.
MODEC
MODEC60 is a major Japanese based company and currently operates 17 FPSOs with 4 more in
construction. It has teamed up with Toyo Engineering and IHI to design a 2 mtpa FLNG vessel called
LiBro 61. The refrigeration cycle will use lithium bromide as a pre-cooling refrigerant followed by a
nitrogen cycle using the AP-N process. IHI will provide the SPB tank design.
Hegh LNG
Hegh LNG62 based in Norway operates five LNG tankers and five FSRUs. Three further vessels are
under construction. It was one of the earliest to pursue the FLNG market and has been in discussion
with energy companies about developing a generic design. Its concept is based on a new build vessel
and originally using the novel and unproven Niche liquefaction process, which is a dual gaseous
refrigerant scheme using nitrogen and methane. This has now changed to proven SMR and DMR
options in line with other FLNG developers. Hegh LNG has recently decided to not to pursue floating
liquefaction but to focus its resources on the FSRU business.
Excelerate Energy
Excelerate Energy63 based in the USA was a pioneer of the FSRU concept with the Gulf Gateway
project offshore Gulf of Mexico. It currently has ten vessels operating either as LNG tankers or
FSRUs. A further eight vessels are under construction by DSME with a capacity of 173,000 m 3 and a
regas capacity in the range of 3-4 mtpa. Excelerate developed its FLSO liquefaction concept for both
inshore (Port Lavaca) and offshore use. The inshore concept located the gas treatment onshore,
freeing up deck space for 4 mtpa liquefaction, whereas offshore was 3 mtpa. Excelerate Energy like
Hegh has decided to not to pursue floating liquefaction and focus on the FSRU business.
57
For description of SBM Mid Scale Floating LNG concept refer to: http://www.sbmoffshore.com/mid/
58
See article Pangea and BW Offshore to partner for Tamar FLNG, 7th March 2013: http://www.2b1stconsulting.com/pangea-
lng-and-bw-offshore-to-partner-in-israel-noble-king-flng/
59
Refer to Borneo Post, 1st April 2014 Bumi Armada eyes the FLNG market: http://www.theborneopost.com/2014/04/01/bumi-
armada-eyes-flng-fsru-market-segments/
60
Refer to MODEC home page: http://www.modec.com/about/index.html
61
See HIS Fairplay communication MODEC Eyes the FLNG market 12th September 2014: http://fairplay.ihs.com/ship-
construction/article/4048021/modec-eyes-floating-lng-market
62
Refer to Hegh LNG home page: http://www.hoeghlng.com/
63
Refer to Excelerate Energy Floating LNG home page: http://excelerateenergy.com/flng/
22
Flex LNG
FlexLNG64 was the pioneer of the commercial pursuit of FLNG projects on a leasing basis. It decided
to withdraw from the FLNG business and is now pursuing the LNG tanker business 65.
64
Refer presentation FLEX LNG Changing the LNG Industry 7th January 2010:
http://www.flexlng.com/publish_files/FLEX_LNG_Presentation_at_SEB_Enskilda_Nordic_Seminar_Copenhagen_7_January_2
010.pdf
65
Refer to FlexLNG home page for new strategy: http://www.flexlng.com/
23
Chapter 8
5
Number FLNG Prospects
0
Australia USA Africa Canada Other
Source: Author
The potential market impact has been well summarised by the following statements:
Golar LNG In an era of intense competition in the LNG industry and the high cost and long lead time of land
based LNG facilities, Golar LNG Limited believes highly cost efficient approaches based on floating LNG
liquefaction, . facilities of the types now being developed will be key to substantial additional growth
opportunities67.
Douglas Westwood Operators are attracted to FLNG, as, compared to its onshore alternative, FLNG
facilities are more secure, can have shorter lead-times, remove the need for long pipeline to shore and offer a
potentially lower-cost alternative to monetizing stranded gas fields.
There is a huge interest in the pioneering projects that will drive market spend over the coming years. Future
commitments by operators to the FLNG market hinges on the success of these pioneering projects. Following
66
Refer to IGU (2015), page 7 LNG Trade
67
See Golar LNG FLNG home page: http://www.golarlng.com/index.php?name=Our_Business%2FFloating_Liquefaction.html
24
these projects is a second wave of new projects that are yet to be sanctioned but are expected to drive a growth
in expenditure from 2019 onwards. This includes major projects in frontier regions such as East Africa. 68
The Maritime Executive Despite a current pause in commitments to new projects, the capital expenditure for
FLNG vessels is expected to amount to $35.5 billion over 2015-202169.
The Maritime Executive - Operators are attracted to FLNG, as, compared to its onshore alternative, FLNG
facilities are more secure, can have shorter lead-times, remove the need for long pipeline to shore and offer a
potentially lower-cost alternative to monetizing stranded gas fields. 70
68
See description of Douglas Westwood World FLNG Market Forecast 2015-2021 Report Description: http://www.douglas-
westwood.com/report/energy/world-flng-market-forecast-2015-2021/
69
See first paragraph in article Waiting for the second FLNG wave by Wendy Laursen 8th February 2015 : http://maritime-
executive.com/features/waiting-for-the-second-flng-wave
70
See article Waiting for the second FLNG wave by Wendy Laursen 8th February 2015, The attraction of FLNG:
http://maritime-executive.com/features/waiting-for-the-second-flng-wave
25
Chapter 9
9.1 Conclusions
Current Projects & Prospects
After 40 years of engineering studies the first FLNG project was approved in 2011 by Shell for its
Prelude field located in the Timor Sea. Following that decision 6 further projects are now in
construction albeit Rotan has just been delayed by 2 years due to current low energy prices. The first
vessel to start operations is likely to be the Petronas PFLNG Satu located on the Kanowit gas field,
offshore Malaysia. The vessel sailed to the field location in May 2016 and start-up is expected in late
2016 or early 2017. The Caribbean FLNG inshore barge is complete and ready for operation but was
not installed due to the lack of available gas feed and the owners Exmar are looking for another
location.
A further 17 FLNG prospects have been identified representing 55 mtpa of LNG production. If half of
these proceed it will result in FLNG production representing 18% of the 241 mtpa global production in
2014 nearly a fifth of the market.
Commercial Considerations
From a commercial standpoint FLNG has opened the opportunity for energy companies to obtain
liquefaction facilities on a leased or tolling basis from the FSU and FPSO contractors. Further the
approach of these companies is quite different from the major energy companies in that they are
26
looking to supply relatively standard designed vessels using functional specifications that can be
reused on other fields. This is very different from the energy company approach to design on a project
bespoke basis and follow the exacting design methods and specifications developed over many
years. Most vendors would say that this approach adds considerable cost. However, both Shell 71 and
ENI have stated that they are seeking a design one and build many philosophy for future
developments.
This functional approach would appear to reduce the development cost considerably based on the
costs currently being quoted by the leasing companies. This will be tested over the next few years as
the first developments become a reality and the actual costs are established. It must be stated that
these same companies introduced leased FSRUs into the terminal market and their success has
been unprecedented in what is a conservative LNG business. The industry is waiting to see if the
same will happen with FLNG.
Golar LNG and Exmar are also looking to build vessels on a speculative basis. This has proved very
successful in the FSRU market by reducing project lead times and enabling earlier production and
revenue and the same would apply here for the liquefaction market. It is likely that these speculative
vessels would need some project specific modifications before delivery but would likely be delivered
far more quickly than a project specific new build vessel or onshore plant.
The recently announced a joint venture between Golar LNG and Schlumberger OneLNG 72 is going
one step beyond by offering a one stop shop for the supply and operation the full offshore
development scope - reservoir, subsea and FLNG vessel including project financing. This could be a
game changer for the smaller independent energy companies who wish to monetise gas reserves
but have limited technical and financial resources
Looking Forward
Many in the LNG industry view FLNG as a game changer for the development of offshore gas fields
in the same way that FPSOs enabled oil production for remote & deep water fields . However their
success will depend on the performance of the projects currently in construction performance not
only in terms of reliable LNG production but whether the expected cost and schedule savings can be
realised. The industry is waiting with interest, particularly in the current low cost energy market where
lower production costs and earlier revenue would offer a major advantage over onshore plants.
71
Refer to The Engineer article on Shell Prelude Design, 4th July 2011: https://www.theengineer.co.uk/shell-set-to-build-
worlds-biggest-floating-structure/
72
http://www.slb.com/news/press_releases/2016/2016_0725_slb_golar_onelng.aspx
27
Appendix 1 First Inshore Barge 1959
Figure 9: The First Inshore LNG Barge
The FLNG barge was installed in 1959 on Lake Calcasieu close to Lake Charles and was designed
as a pilot unit producing 50,000 tpa of LNG.
The plant comprised all the necessary processes including amine wash, drying, pre-cooling to remove
heavy hydrocarbons followed by liquefaction using the turbo-expander process. Gas that was not
liquefied was compressed and cooled and recycled back into the turbo-expander.
LNG was sent to a land based double containment 5,700 m 3 LNG tank constructed from aluminium
with perlite insulation.
This LNG was originally destined for shipment to Chicago by barge but supplied the first cargoes to
Canvey Island terminal in the UK until the Algerian plants came on stream.
28
Appendix 2 List of FLNG Developments
Country Developer Project mtpa Start-Up
Construction
Total 58.1
73
Was delayed to 2020 but is back on schedule
74
Construction has started on speculative basis and FID expected mid 2016
75
Was assigned to Columbia but gas not now available and awaiting new location
76
On hold
77
On hold. Excelerate Energy focusing their resources on FSRU market
29
Appendix 3 FSRU Projects
Start-
Project Country Status Type FSRU Contractor
up
Gulf Gateway USA Retired 2005 SRV Excelerate Energy
Teesside UK Retired 2007 SRV Excelerate Energy
30
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Ledesma, David: Floating Liquefaction (FLNG): How far will it go? 20th World Petroleum
Congress
IGU (2015): IGU World LNG Report 2015, page 7 LNG Trade:
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2015%20Edition.pdf
Ledesma, David: Floating Liquefaction (FLNG): How far will it go? 20th World Petroleum
Congress
Ledesma, Palmer and Henderson (2014): The Future of Australian LNG Exports Will
domestic challenges limit the development of future LNG export capacity?, D. Ledesma, N.
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Floating LNG: Revolution and evolution for the global industry, KMPG, Nov 2014
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Side-by-Side LNG Loading Article by FMC LNG Industry March 2016 pp 41-44
31